Agent fires opening shots in e-book war

A decision by the agent Andrew Wylie to set up as an e-book publisher has caused ructions in London's literary world.

The author Martin Amis could be affected by the dispute between his agent and his publisher.

One of the world's foremost literary agents, one who represents authors such as Martin Amis and Philip Roth, has caused something of a stink in the books world with his plans to bypass publishers and produce his own ebooks. Andrew Wylie announced last week that he was setting up a digital-only publishing house called Odyssey Editions, using works by his established list of clients - some of the biggest authors of the 20th century - whose e-rights have not been sold on yet.

The question of digital rights has been rigorously debated in publishing circles for some years now, and Wylie is one of many agents to have voiced their concerns over what they see as a "land grab" by publishers, who are offering similar royalty rates for e-books when, as the agents see it, the cost base is much lower. Publishers for their part argue that they are investing far more in digital programs, infrastructure and efforts to combat piracy than they are reaping from minuscule e-book sales. That is even before you consider that the cost of producing a printed book is just a fraction of the overall expenditure. Marketing, publicity and design all take their chunks out of the margins. Readers also expect e-books to be that much cheaper to buy, so where, publishers ask, is this extra margin for royalties to come from? From that perspective, agents are just as guilty of attempting a land grab as the other way around.

So battle lines had been drawn, but it was more of a cold war than one of hand-to-hand combat. Agents refused to sell e-book rights without securing a favourable e-royalty rate, ideally 50 per cent or more. Publishers, most notably Random House, refused to budge upwards, leaving the publisher in effect owning only print rights. This stand off has lasted months, and would have continued for much longer, had the Wylie Agency, with its stellar list of authors, not acted.

The American Authors Guild, which has always pushed for higher royalty rates for writers, has welcomed it as a positive step for negotiating digital contracts, saying in a statement that "publishers have brought this on themselves". But the group also described the move as "weird, no matter how you look at it", and urged publishers to start offering better royalty rates, so that the eco-system between publisher, agent and author can return to what it once was.

Predictably, publishers were not so enthusiastic, and within hours of the announcement Random House, publisher of a number of the authors on Odyssey's list, including Amis and Roth, claimed the move "undermines our longstanding commitments to and investments in our authors, and it establishes this agency [Odyssey Editions] as our direct competitor. "Therefore, regrettably, Random House on a worldwide basis will not be entering into any new English-language business agreements with the Wylie Agency until this situation is resolved."

Although aggressive, the move is understandable. Early signs are that readers tend not to buy books in both digital and print formats, unless they are sold in a package, and therefore e-books are competing with print books. This cannibalisation of sales is reluctantly accepted by publishers when they take the revenues - but not when the revenues go into someone else's pocket. When authors represented by Wylie and published by Random House have a new book for publication, this could present an interesting challenge for both sides.

Others have challenged the move based on Wylie's two-year exclusive deal with Amazon, cutting out all other potential retailers. John Sargent, chief executive of Macmillan US, whose authors include VS Naipaul and Oliver Sacks, said he was "appalled" that Wylie had "chosen to give his list exclusively to a single retailer", stressing it was "an extraordinarily bad deal for writers, illustrators, publishers, other booksellers, and for anyone who believes that books should be as widely available as possible".

Retailers - already concerned about their position in the new world order - were also concerned. David Kohn, head of e-commerce at the British bookseller Waterstone's, said: "It is very disappointing to see that some of our best writers' work is only to be available in such a limited fashion. It does not help build the market, nor does it serve readers well." Given Wylie's comments in the past, it is clear this move is motivated by a desire to get the best deal for his authors. But whether that has been achieved - both in terms of sales and in future deals - is slightly less certain. The only unequivocal winner so far in this case, as in so many, appears to be Amazon.